Palatinate investigates the rise of Purpose Built Student Accommodation in Durham and its criticisms

The City of Durham has seen a sharp increase in the construction of Purpose Built Student Accommodation (PBSA) in recent years, with a staggering number opening across the Viaduct, Claypath, and Gilesgate Bank areas.

Further PBSA projects are in development, with two schemes being built at the bottom of Claypath as well as the redevelopment of the former County Hospital in the Viaduct. Each of these are expected to hold between 350 and 450 beds.

The Neighbourhood Planning Forum (NPF) outlines that, at the start of the 2016/17 academic year, there were 787 beds in PBSA in Durham, with many left vacant. Chapel Heights, run by Fresh Student Living, is currently showing 44 out of 198 rooms to be vacant. 1,027 are under construction and are expected to open for the 2017/18 academic year, and still another 3,438 are planned to open in the coming years.

There has been considerable opposition among local residents to the construction of more accommodation blocks of this kind, with concerns being lodged against the levels of occupation and the impact on family housing in the city.

Councillor David Freeman, representing the ward of Elvet and Gilesgate, explained that he has opposed the majority of these developments because “Durham City needs more affordable housing for the local community, but instead nearly every site has been bought by property developers.

“When the applications started being made, it was also not evident that Durham University was planning to expand its number massively up to 2020, so there was not a perceived need for the developments,” Mr Freeman said.

“It was also a concern that the new developments were not linked with Durham University and therefore would not have the pastoral care or security of the colleges. Now that some PBSAs have been built, my concern is the under-occupation of them and the very high rental costs. The two could well be linked.”

Mr Freeman pointed to the planned increase in student numbers in Durham to reject the idea that PBSAs will have a positive impact on family housing in the city. “I do not believe that PBSAs will have any positive effect on reducing the number of Houses in Multiple Occupation (HMOs,) which was the argument put forward by developers. This is because the number of beds in PBSAs and the two new planned Durham University colleges mirrors the planned increase in student numbers, so there will not be students leaving HMOs to move to PBSAs and therefore free houses to become residential again.”

Mr Freeman’s argument was firm. “Ultimately I blame the present situation we have with student housing on Durham University. In the 1990s it started expanding but failed to build colleges to accommodate the increased numbers. They created a market for landlords to buy what were then cheap (but now expensive) terraced properties and former Council houses.

“This has led to many streets losing any balance between residents and students. This is not good for residents who have empty streets for many weeks each year or I believe students.”

He called for the University to cooperate with these schemes “to ensure that students are getting a fair deal, but also [to ensure] that it can provide some of the care and security it provides in its own colleges.”

Bill Williamson, a former professor at Durham University, highlighted his concerns over the prioritisation of the construction of PBSAs over other areas of development in Durham.

Mr Williamson told Palatinate: “During the election campaign, I canvassed in Gilesgate/Pelaw ward where a 300 bed PBSA is being built. It is right beside a poor area of the city and its presence there shows up some of the wider divides of our society and the craziness of current planning and housing arrangements.

“Gilesgate—and I’m sure this is true of many older areas of university cities—needs renewal and development and decent housing for families. PBSAs contribute nothing to this need. I noticed that some of the former council properties in that area are being bought up by landlords and the result is immediately visible in neglected and/or paved over gardens,” Mr Williamson said.

“PBSAs are expensive; landlords will find a ready market for students wishing to live together in ordinary houses at a lower cost. The longer term effects on the urban fabric of the city will be a damaging one. We need tougher, more imaginative planning guided by a strong understanding of what urban areas need to become vibrant, productive communities.”

Roger Cornwell, Chair of the City of Durham Trust, and Chair of the NPF, also commented that the increase of around 6,100 students in the city due to the University’s plan to increase student numbers “is a matter of great concern to all of the residents’ groups.”

Although the increase, as part of the University’s new ten-year Strategy, will be gradual, many of the PBSAs in development will open in 2018 or 2019. This will lead, in Mr Cornwell’s view, to “a short-term over-provision.” He continued to express the concern that, although the PBSAs might fill up in the long term, this was uncertain.

Mr Cornwell also detailed how patterns demonstrate that PBSAs appear to be more attractive to overseas students and that UK students tend to choose HMOs over such forms of accommodation. He addressed the concern that, although the University intends to increase the proportion of international students to 35%, “Brexit, and in particular a hard Brexit, will reduce the number of immigrants,” which might result in PBSAs struggling to find occupants for their rooms.

Addressing these concerns about a drop in applications from international students, Professor Alan Houston, Pro-Vice-Chancellor (Education), Durham University, stated: “At the undergraduate level, international non-EU applications have grown, while EU applications have decreased. Nonetheless, we have slightly more EU students now than we did two years ago. We hope that the recent announcement that those EU students applying to start courses in 2018/19 will pay the same fees as UK students will mean that Durham continues to be an attractive destination for EU students.”

Mr Cornwell also drew attention to the University’s intention “to enter into agreements with some, but not all, of the PBSA providers,” highlighting that “life could prove difficult for unaccredited PBSAs.”

Addressing the development of PBSAs in Durham, Owen Adams, Pro-Vice-Chancellor (Colleges and Student Experience), Durham University, confirmed the University’s desire to work with several of these schemes, stating: “Our aspiration is that the percentage of students living in collegiate accommodation will rise to over 50 per cent. Consideration will also be given to working with the private sector to utilise developments which already have planning permission in a managed way.”

Mr Adams also responded to the idea that students may seek alternatives to college accommodation due to the recent announcement of a further increase in fees. “The cost of providing our college residences rises year on year and we have to review prices on an annual basis to ensure we can continue to provide a high standard of accommodation and services. When reviewing our college residence charges, we consult extensively, including with student representatives. We strive to offer good value for money to our students.

“We have listened to our students and understand that they would like to see a range of accommodation packages that go beyond what is currently offered. A Residential Accommodation Differential Pricing Group has been established to consider various options for the setting of differentiated residence charges from the 2019/20 academic year onwards,” Mr Adams said.

Student landlord Peter Smith, director of Bill Free Homes, has also expressed concern over the construction of PBSAs, warning that high prices and a low desire among students to live in such accommodation, as opposed to University accommodation and HMOs, will cause many of these properties to struggle.

Smith told Palatinate: “In Durham there are 1,690 studios currently being planned or constructed. This represents about 10 per cent of bed requirements for the whole University (only 4 per cent can afford this level) and about 41 per cent of the postgraduate bed requirements for whom it is said to be aimed.

“I feel that this is overly ambitious given that the average cost is almost double that of an HMO room, whilst it can be conceded that it represents good value for couples who previously have not been catered for except in one university-owned property in Durham.”

He highlighted that “some PBSA schemes will prosper either through exceptional location (or with good transport links), great design, keen pricing or excellent management, however these are unlikely to be in all studio schemes.”

Smith expressed particular concern for developments such as Chapel Heights and the proposed site at the Berendsen Laundry, which he feels seem “if not doomed to failure then perhaps doomed to very challenging times ahead.” He highlighted that “there is no evidence that developers have canvassed local students for opinions or had much interaction with Durham University. They appear to be relying on national trends and hoping that ‘one size fits all.”

He highlighted that the influx of students in line with the University Strategy is “the great unknown factor” regarding the occupation of PBSAs in Durham, but that “any increase in students yet to be announced may create a situation where extra students may be introduced to Durham but without any greater ability to pay the requirements of the rents demanded by the PBSA.”

Addressing the issue of family housing in Durham, Smith commented: “Durham University is unlikely to close and therefore city occupancy patterns are unlikely to change unless tourism fills the voids. Whilst residents who had previously railed against HMO and now feel that PBSA are an equal problem, there is no solution, evidence shows that even if the HMO properties were emptied of students it is unlikely that families will return.”

This increased investment in PBSAs is not a phenomenon unique to Durham. Knight Frank, a real estate consultancy, has estimated that the market for PBSAs in the UK is worth £46 billion, with cities across the UK, particularly London and Manchester, witnessing a rise in the investment and development of student accommodation buildings.

James Pullan, head of student property at Knight Frank, has said that demand for investment in this area is still high despite the concern that Brexit would impact the number of international students coming to the UK to study.

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